The cost of Newfoundland and Labrador's expropriation of AbitibiBowater's timber and water rights in central Newfoundland has grown by another $72 million.
The former government of Danny Williams rushed legislation through in 2008 to seize timber and water rights associated with a mill that Abitibi was closing, as well as hydroelectric resources owned by Fortis Inc.
On Tuesday, Natural Resources Minister Tom Marshall told the house of assembly that the government had reached a deal with Fortis Inc. and a consortium of lenders.
"The government is protecting the assets that belong to the people of Newfoundland and Labrador," Marshall told the legislature.
"This is a fair settlement for the people of the province and is the appropriate course of action for us to take," he added.
The deal includes $18.4 million in cash to be paid directly in Fortis, which had already been paid about $4 million. As well, Nalcor, the province's Crown energy corporation, is taking on new debts of $54 million.
The government moved quickly to expropriate Abitibi's assets in 2008 when the company indicated it was preparing to shut down the century-old newsprint mill in Grand Falls-Windsor. The hasty expropriation, though, also left the government inadvertently seizing the environmentally contaminated mill itself.
The expropriation has racked up other costs over time. The government has already paid another $70 million to compensate other partners for those hydro assets, and the federal government paid about $130 million to settle a NAFTA complaint that Abitibi had filed, claiming that the expropriation was illegal.
'Time was of the essence'
Premier Kathy Dunderdale told the legislature that the government still defends the expropriation, as it would not allow timber and water rights to leave the province.
"When we made the decision to expropriate Abitibi’s assets, we did so because time was of the essence," she said.
NDP Leader Lorraine Michael was not convinced.
"What the premier should have said: 'I ought to have known how incompetent that government was that they made the mistake they made that gave us the mill that we now have around our necks,' " Michael said.
"I will now ask the premier, who I am sure thinks this is a government investment, what are the people of the province getting from that government investment?" said Michael.
Dunderdale said the government had scooped up valuable assets for a very good price.
"First of all what we got in the expropriation was hundreds of millions of dollars of assets that we clearly understood at the time will be able to take care of any liabilities that might occur as a result of the expropriation," Dunderdale said.
"At the end of the day, once all the liabilities have dealt with, the people of this province will still have a great number of assets at their disposal and at bargain-basement rates to drive the economy in the central part of this province," said the premier.
Liberal Leader Dwight Ball said the final tally of the 2008 expropriation is not yet complete.
"Really, we still have, I guess, some liability issues around the expropriation of the mill in Grand Falls-Windsor and the environmental cleanup that would be attached to that mill, so the story is not over," Ball said.